Biloxi Marsh Lands Corporation (PINK SHEETS: BLMC) today
announces its unaudited results for the second quarter and first
six months of 2012 and provides update. Revenue for the three
months ending June 30, 2012 from oil and gas production from its
fee lands was $89,658 compared to revenue of $379,255 for the
second quarter of 2011. For the first six months of 2012, revenue
generated from the Company’s fee lands decreased to $214,936 from
$868,789 for the same period of 2011. During the second quarter of
2012, total revenue includes a net loss of $223,527 generated from
the Company’s investment in B&L Exploration, LLC (“B&L”)
compared to a loss of $1,825,816 for the second quarter of 2011.
Correspondingly, total revenue for the six months ended June 30,
2012 includes a net loss of $795,860 generated from B&L. This
loss compares to a net loss of $1,775,060 from B&L for the
first six months of 2011. During the second quarter of 2012, the
Company realized a cumulative gain from the sale of investment
securities in the amount of $65,124 compared to a cumulative gain
from the sale of investment securities of $498,007 for the same
period in 2011. For the first six months of 2012, the gain from the
sale of investment securities was $78,835 compared to $553,422 for
the first six months of 2011. The Company’s operating expenses for
the second quarter of 2012 were $186,940 compared to operating
expenses of $271,884 for the same period of 2011. Operating
expenses for the first six months of 2012 and 2011 were $440,593
and $573,860, respectively, representing a reduction in expenses of
23% year over year. The Company incurred a net loss of $124,177 or
$.05 per share for the second quarter of 2012 compared to a loss of
$840,545 or $.31 per share during the second quarter of 2011.
Meanwhile, for the first half of 2012, the net loss was $474,919 or
$.17 per share compared to a net loss of $570,890 or $.21 per share
for the same period of 2011.
On June 15, 2012 in an effort to recover damages for property
lost by the adverse effects of the Mississippi River Gulf Outlet
(“MRGO”) canal which was constructed by the U.S. Army Corps of
Engineers (“USACE”) during the early 1960’s and abandoned after
hurricane Katrina, the Company along with Lake Eugenie Land &
Development, Inc. (“LKEU”) filed suit against the USACE seeking;
(1) compensation for the lands destroyed through erosion by the
MRGO; and (2) the cost of providing shore protection to prevent
future erosion, or the market value of any lands destroyed in the
future if shore protection is not provided. The suit was filed in
the United States Court of Federal Claims in Washington D.C. and
has been assigned to Senior Judge Robert H. Hodges, Jr. We
anticipate that this suit will take a protracted period of time to
resolve and, as of this time, cannot give a forecast as to the
timing of resolution. The Company has negotiated a full contingency
fee and expense agreement with the law firm handling this matter on
behalf of the Company.
The Goodrich Land and Energy No. 1 well located in St. Martin
Parish, Louisiana and operated by Linder Oil Company was placed on
production during the second quarter. Additionally, the Fleming
Plantation No. 1 well located in Barataria Field, Jefferson Parish,
Louisiana and operated by Alpine Exploration Co.’s Inc. was placed
on production during the second quarter. With the additions of the
Goodrich and Fleming Plantation wells, B&L now holds working
interests in four additional wells that have come on production
during the first six months of 2012. Both the SL 19706 No. 1 well
operated by Clayton Williams Energy, Inc. and the CL&F No. 1
well operated by Forza Operating, LLC came on production during the
first quarter of 2012. As of June 30, 2012, B&L has working
interests in 10 wells capable of production and to which proved
reserves are assigned.
As of June 30, 2012 the combined gross daily production rate
from 4 wells operated by the Company's mineral lessees was
approximately 3.8 million cubic feet (mmcf) of natural gas with net
daily production accruing to the Company of approximately 0.51
mmcf. The Ducros/SL 17958 Well operated by Alta Mesa, one of the
Company’s mineral Lessees, went off of production due to mechanical
problems requiring rig intervention to repair. This well was
producing at rate of approximately 3,500 mmcfg per day prior to
going off production in March of 2012. Alta Mesa advises that they
hope to return this well to production during the second half of
2012. The Company has approximately 50% of the CRIS I RC SUA Unit
from which this well is being produced.
Combining the 4 wells operated by the Company's mineral lessees
with BLMC’s interest in the B&L wells, the total combined daily
production accruing to BLMC (from B&L and Lessee wells) as of
June 30, 2012 was approximately 3.2 mmcfe (natural gas equivalents
15:1 oil to gas ratio) per day. It should be noted that 2 of the 10
wells in which B&L has a working interest were temporarily
shut-in, thus not producing on June 30, 2012.
McMoRan Exploration Co. (NYSE:MMR) recently announced its
acquisition of exploratory rights to 68,000 gross acres located in
Iberia, St. Martin, Assumption and Iberville Parishes, Louisiana
and its expectation to commence drilling an exploratory well in the
second half of 2012. This prospect is identified as “Highlander
onshore prospect” with the initial test well having a proposed
total depth of 30,000 feet targeting the Eocene, Paleocene and
Cretaceous objectives seen below the salt welds in MMR’s Davy Jones
wells. B&L is contractually entitled to a 1.5% of 8/8ths
overriding royalty interest in the exploratory well and in all
mineral leases obtained by MMR in this 68,000 gross acre Highlander
prospect area.
During the June 20, 2012 Central Gulf of Mexico Lease Sale
216/222 held by the Bureau of Ocean Energy Management (BOEM) in New
Orleans, Louisiana, B&L, through its working interest partner
Destin Resources, LLC, was the apparent high bidder on Eugene
Island Block 74. All apparent high bids are subject to a review
process by BOEM before they can be awarded. If awarded this lease
will add approximately 5,000 gross acres to B&L’s leasehold
inventory and will hopefully be additive to B&L’s proved
reserves. B&L would have a 60% working interest in Eugene
Island Block 74.
Meanwhile, 2D seismic operations are scheduled to commence
during the second half of 2012 on B&L’s Phoenix Prospect in
Union Parish, Louisiana. B&L and its operating partner,
Greystone Oil & Gas, LLP, control approximately 7,000 gross
acres in Union Parish. The objective in this prospect is the upper
Smackover intervals as well as Lower Smackover Brown Dense
formation.
In addition to the foregoing projects/prospects, B&L is
actively assembling additional prospective acreage on which to
explore and possibly place working interests with third party
partners. During the current period of higher drilling costs,
B&L is actively engaged in this strategy of assembling
prospective acreage in an effort to improve drilling and completion
economics and manage risk on a going forward basis. B&L plans
to continually evaluate and adapt its strategies based on variables
such as commodity prices, drilling and completion costs while
continually looking for opportunities that represent value and
allow B&L to manage risks.
B&L was organized as a limited liability company (LLC) under
the laws of Louisiana in July of 2006. B&L’s Class A members
are BLMC and Lake Eugenie Land & Development, Inc. (LKEU),
which have membership percentages of 75% and 25% respectively. The
Operating Agreement was amended on November 16, 2009 to create a
Class B membership to allow for certain future projects at the
discretion of the board of managers to be participated by either
Class A or Class B members or a combination of the respective
Classes. B&L’s Class B members are BLMC and LKEU, which have
membership percentages of 90% and 10% respectfully.
William B. Rudolf, President and CEO, commented: “With the
depressed price of natural gas, it has proved difficult to attract
potential Lessee for exploration on our fee lands. Meanwhile,
B&L’s revenues also have been negatively affected by the lower
price of natural gas. To mitigate lower natural gas prices, B&L
has successfully diversified into oil prospects and prospects rich
in natural gas liquids which have helped to offset lower natural
gas prices. Additionally, B&L is currently focused on putting
together significant acreage positions which will allow it to
achieve better economics and manage inherent risks in the current
environment of higher drilling and completion costs. We are very
excited about obtaining an overriding royalty interest in MMR’s
ultra-deep Highlander Prospect covering some 68,000 acres onshore
in Louisiana. B&L’s success in acquiring this position as well
as other significant acreage positions in prospective areas should
favorably position B&L for the future and lead to a robust
drilling program during the end of 2012 and continuing into
2013.”
The Company maintains a website, www.biloximarshlandscorp.com,
and strongly recommends that all investors and interested parties
visit the website to view historical press releases, historical
financial statements, and other relevant information.
Biloxi Marsh Lands Corporation owns approximately 90,000 acres
of marsh lands located in St. Bernard Parish, Louisiana. As the
landowner, it derives revenues from oil and gas exploration and
production activities that take place on or near the Company’s
land. The Company also derives revenues and expenses from its
ownership interest in B&L Exploration, LLC and minimal revenues
from surface rentals.
This news release contains forward-looking statements regarding
oil and gas discoveries, oil and gas exploration, development and
production activities and reserves. Accuracy of the forward-looking
statements depends on assumptions about events that change over
time and is thus susceptible to periodic change based on actual
experience and new developments. The Company cautions readers that
it assumes no obligation to update or publicly release any
revisions to the forward-looking statements in this report.
Important factors that might cause future results to differ from
these forward-looking statements include: variations in the market
prices of oil and natural gas; drilling results; unanticipated
fluctuations in flow rates of producing wells; oil and natural gas
reserves expectations; the ability to satisfy future cash
obligations and environmental costs; and general exploration and
development risks and hazards. Readers are cautioned not to place
undue reliance on forward-looking statements made by or on behalf
of the Company. Each such statement speaks only as of the day it
was made. The factors described above cannot be controlled by the
Company. When used in this report, the words “believes”,
“estimates”, “plans”, “expects”, “should”, “outlook”, and
“anticipates” and similar expressions as they relate to the Company
or its management are intended to identify forward-looking
statements.
The following “Statements of Assets, Liabilities and
Stockholders’ Equity” and “Statements of Revenues and Expenses”
have been derived from interim un-audited financial statements
which do not include the information and footnotes that are an
integral part of a complete financial statement.
BILOXI MARSH LANDS CORPORATION Statements of Assets,
Liabilities, and Stockholders' Equity June 30, 2012 and 2011
Assets 2012 2011
Current assets: Cash and cash equivalents $ 1,879,183 3,250,352
Accounts receivable 42,687 413,758 Prepaid expenses 56,878 50,380
Accrued interest receivable 22,250 25,187 Deferred tax asset
1,121,034 — Federal income taxes receivable 16,136 298,433 State
income taxes receivable 30,154 41,562 Other assets 3,830
3,830 Total current assets 3,172,152 4,083,502
Other assets: Investment in partnership 1,289,999 2,983,839
Marketable debt and equity securities - at cost 10,918,088
10,583,580 Land 234,939 234,939 Levees and office furniture and
equipment 299,574 295,166 Accumulated depreciation (299,574 )
(295,166 ) Total other assets 12,443,026 13,802,358
Total assets $ 15,615,178 17,885,860
Liabilities and Stockholders' Equity Current liabilities:
Accrued expenses 11,323 35,120 Other current liabilities 4,608
4,087 Total current liabilities 15,931 39,207
Stockholders' equity:
Common stock, $.001 par value. Authorized,
20,000,000 shares; issued, 2,851,196 shares; outstanding, 2,726,778
and 2,741,428 shares in 2012 and 2011, respectively
47,520 47,520 Retained earnings 15,876,794 17,982,198
Treasury stock - 124,418 and 109,768
shares in 2012 and 2011, respectively, at cost
(325,067 ) (183,065 ) Total liabilities and stockholders' equity $
15,615,178 17,885,860
BILOXI MARSH LANDS CORPORATION Statements of Revenues
and Expenses June 30, 2012 and 2011
Three Months Ended
Six Months Ended
June 30
June 30
2012 2011 2012 2011 Revenues:
Oil and gas royalties $ 98,155 $ 395,539 $ 233,042 $ 907,522
Severance taxes (8,497 ) (16,284 ) (18,106 )
(38,733 ) Oil and gas royalties, net 89,658
379,255 214,936 868,789
Other (loss) income: Income (loss) from investment in
partnership (223,527 ) (1,825,816 ) (795,860 ) (1,775,060 )
Dividends and interest income 45,028 64,907 86,170 134,418 Gain on
sale of securities 65,124 498,007 78,835 553,422 Other 6,150
4,100 74,366 10,250
Total other (loss) income (107,225 )
(1,258,802 ) (556,489 ) (1,076,970 ) Total revenues
and income (17,567 ) (879,547 ) (341,553 )
(208,181 ) Expenses: Total expenses 186,940
271,884 440,593 573,860
Net (loss) income before income taxes (204,507 ) (1,151,431
) (782,146 ) (782,041 ) Income tax (benefit) expense (80,330
) (310,886 ) (307,227 ) (211,151 ) Net (loss)
income $ (124,177 )
$
(840,545 ) $ (474,919 )
$
(570,890 ) Net (loss) income per share $ (0.05 ) $ (0.31 ) $
(0.17 ) $ (0.21 )
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